Barry Cheung charged over stock market fraud

Former executive councillor Barry Cheung has been arrested on suspicion of misleading the stock market regulatory body and is accused of cheating HK$30 million out of a company in 2013. Cheung, the former boss of the now-defunct Hong Kong Mercantile Exchange, was arrested by the police’s Commercial Crime Bureau at his Happy Valley home on Thursday morning and taken to Eastern Magistracy in the afternoon. He has been charged with allegedly misleading the Securities and Futures Commission (SFC) over the performance of the commodities trading platform, to try and stop the regulatory body from revoking its trading licence. The case, which has been transferred to the District Court, is due to begin on August 24. Cheung has been released on a cash bail of HK$50,000. The prosecution alleges the 59-year-old conspired with a co-defendant – the exchange’s then chief financial officer, Jacky Choi – to conceal the exchange’s true financial position, and to allow false or misleading information and reports to be supplied to the commission between May 2012 and May 2013. Cheung founded the electronic commodities exchange which began trading in 2011 but ceased operations two years later. The former executive councillor also faces a separate count of fraud, for allegedly cheating Sinomax Finance out of HK$30 million in 2013 to benefit the British Virgin Islands firm, New Effort Holdings, which was the majority shareholder of the exchange owned by Cheung. Cheung had previously been sentenced to six weeks in prison by Kowloon City Magistracy for failing to pay an employee at the exchange. But the prison term was eventually quashed by the High Court. He was instead ordered to perform 160 hours of community service. In 2015, Cheung was declared bankrupt with debts of HK$116 million.